Operations Update

RNS Number : 7195Z

Red Rock Resources plc

21 September 2015

 

Red Rock Resources plc

("Red Rock" or the "Company")

Operations Update

21 September 2015

Red Rock Resources plc, the mining and exploration company with interests in gold in Africa and investments in other mineral assets, announces an operations update.

Gold interests

Colombia

Following the sale of the Company's interests (see announcements of 14^th April 2015, 1^st May 2015 and 15^th May 2015) the purchaser, Colombia Milling Limited, is making progress with the reconfiguration work on the plant at El Limon, as part of an investment programme to increase plant throughput and enable the business to process ore from other operations in the region. The next scheduled payment to Red Rock of USD225,000 is due in January 2016, and the royalty stream will start to flow once the plant is recommissioned. USD100,000 was paid in respect of exclusivity periods offsettable against consideration, and USD450,000 was paid at the time of completion. The sum of future payments and royalties payable is USD4,450,000, including a USD1,000,000 Note secured over the sold assets.

Kenya

The Company continues to pursue action locally to protect its position and its rights over the 1.2m oz gold Resource at Migori.

Ivory Coast

Red Rock has applications and interests in a number of promising licenses and these will be the focus of future gold exploration, either in joint venture or as sole operator. How the Company can best further its West African interests without incurring excessive costs in the current market environment is under review.

Non-gold interests

Elephant Oil Limited (EO)

Red Rock owns 4.76% of EO, at a cost of £275,000. EO is a privately held independent oil exploration company holding a 100% interest in the production-sharing contract ("PSC") on Block B, onshore Benin, on the prolific West Africa Transform Margin. The block covers 4,500 km2, or approximately two-thirds of the coastal basin. Preparations are underway for a new 2D seismic acquisition programme that will be used to define a drillable prospect, for the first exploration well onshore in Benin.

Jupiter Mines Ltd ("JMS")

As noted in the announcement of the JMS results of 26^th June 2015, the Company holds 27,324,375 shares in the non-listed JMS (1.2% of issued capital). The net assets per share at the February 2015 year end were AUD 19.6c, for a total value on Red Rock's holding, on this measure, of approximately AUD5,400,000.

Conditions in the Manganese market have become challenging, but the Tshipi mine (49% owned by JMS) has been stimulated to seek added efficiencies and remains among the lowest cost producers.

Star Striker Ltd (ASX:SRT)("SRT") formerly Resource Star Ltd (ASX:RSL)("RSL")

Following approval at a meeting of shareholders, Resource Star Ltd, the former uranium exploration associate in which the Company currently holds 65,335,134 shares (amounting to 10.29% of the issued share capital after a recent issue), as well as 5,213,290 options exercisable up to 31^st March 2016 at a price of AUD0.004 per RSL share, changed its name to Star Striker Ltd with effect from 15th September 2015, and now trades on the Australian Stock Exchange under the ticker symbol SRT.

On 21^st September 2015 SRT announced its results for the year to 30^th June 2015. Net loss for the year increased to AUD1,160,457 from AUD614,347 in the prior year, and net equity after writedowns increased to AUD342,684, of which AUD322,138 was cash or cash equivalents) from AUD(94,049) in the prior year. Since year end SRT has carried out a financing to raise approximately AUD298,000.

SRT continues to seek investment opportunities in the resource or other sectors, while strengthening its balance sheet. 15% held Sugar Draqon Ltd has appointed a financial advisor and is preparing for listing; pending listing SRT has taken a prudent view of this investment and written down its AUD500,000 investment to AUD120,164.

Further details of the results are available at http://www.asx.com.au/asxpdf/20150921/pdf/431glhwwgq1w1l.pdf 

As at close of business on 21st September 2015 the market value of the SRT shares and options owned by Red Rock was AUD684,630.

Other

Reorganisation

In order to prepare the Company for what may be a continuation of difficult market conditions and to cut costs, a review of staffing levels and functional requirements has been for several weeks in progress. Substantial measures have already been taken and on conclusion of the process a further announcement will be made setting out the main actions taken and their effects on the cost structure of the business. 

Andrew Bell, Chairman, states: "We have taken and are taking further radical steps to restructure not only our balance sheet but our cost structure. Improvement of our cash flow balances, both by reducing outflows and creating inflows, is a principal objective, since this will cause the market to attribute more value to the strong asset backing of the Company and provide a more robust platform for growth and for taking advantage of opportunities that arise in the depressed natural resource space."

For further information, please contact:

Andrew Bell 0207 747 9990 or 0776 647 4849                               Chairman Red Rock Resources Plc

Roland Cornish/ Rosalind Hill Abrahams 0207 628 3396            NOMAD Beaumont Cornish Limited

Jason Robertson 0129 351 7744                                                   Broker Dowgate Capital Stockbrokers Ltd

Christian Pickel 0203 128 8208                                                    Media Relations MHP Communications

 

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